Changes to VAT on room hire

A recent HMRC change to how VAT is applied to room hire has been brought to our attention.

Previously VAT had been exempt on the room hire itself. However VAT is now applicable to room hire when it comes together with other supplies and services that are subject to VAT – such as sound technicians or box office use. The VAT on room hire is charged at the standard rate of 20%.

We know some groups have already encountered the new rules when hiring rooms. If you are looking to hire any venues it might be a good idea to clarify the final costs and VAT so you can budget accordingly.

We have updated our resource page on VAT in line with the change. The part relating to room hire can be found at point 7 (c and d). Two further updates have been made to the resource:

  • the latest threshold for obligatory VAT registration (point 1)
  • sponsorship income, where the only benefit is a simple acknowledgement of the sponsorship name, has been added to the list of income exempt from VAT (point 5) VAT is an important issue for charities so we recommend reading the briefing in full

We would like to thank Les Howard of VAT Advice, one of our Corporate members, for updating the Information sheet. Les also has a special offer for Making Music member groups; an initial response to any VAT enquiry is free of charge. Just email Les at Les@vatadvice.org.uk and put ‘Making Music’ in the subject line.

As ever, if you have any questions please email us at info@makingmusic.org.uk or call us on 020 7939 6030 (Monday – Friday 10am-5pm).